SC puts an end to network biz

KATHMANDU, MAR 30 -

A Supreme Court’s decision on Wednesday formally put an end to network marketing business that cheated millions of Nepalis over the last decade.

The apex court upheld the government’s decision to ban 20 such companies, stating that such businesses were against the welfare of consumers and hold no legal ground. With Wednesday’s decision, all businesses based on multi-level marketing (MLM) or pyramid-based network have become illegal in the country. “All pyramid-based network marketing has become illegal now,” said Jagganath Mishra, secretary of the Forum for Consumer Rights Protection.

The government had banned all network marketing companies selling goods on the basis of pyramid networks after the multi-billion Unity Life International (ULI) scam two years ago. Following which, around two dozen companies involved in network marketing business filed a writ petition in the SC on May, 2010, against the government’s decision to scrap the Directives on Network Marketing of Commodities.

The Supreme Court on May 30, 2010, had issued an interim order, directing the government not to ban network marketing business. Four companies—Herbo International, Best World Business Link, Crystal Vision International Limited and Robious International—had been running their businesses based on that interim order.

After the Supreme Court’s decision, the government has said it will initiate legal action against companies, including Herbo, once it gets a copy of the court’s decision.

“The government will take legal action against Herbo after following necessary procedures,” said Shankar Paudel, the officiating director general at the Department of Commerce.

He said the department too could file a case based on the Consumer Protection Act. “Being a fraud case, the Central Investigation Bureau (CIB) too can take action against Herbo International,” said Paudel.